Have you ever wondered what deep, dark secrets reside in the deep recesses of your personal banker’s head? If not, you should; because these secrets could affect your ability to get a personal loan from your bank. Here’s a look at five common secrets about personal loans that no one, particularly your banker, ever told you.
The age factor
Did you ever wish you were older? Or younger? It turns out that your bank might have, too.
Granted, your banker may not admit this but truth be told, if you’re just 18 or over 65, then you may have a more difficult time securing a loan. Your banker won’t tell you this because it sets him/ her up for a case of age discrimination.
You can fight the effects of this unspoken issue by showing that you’re financially responsible. This means that you keep your debt-to-income ratio low and your credit score high. It also means that you have an admirable history of employment, always pay your bills on time, and have a source of steady income.
The bank’s employees make money if they sell you a credit card
Or a consolidation loan. That credit card or loan that your teller is encouraging you to sign up for could earn him/ her a referral fee. There are some rules, meaning that the employee can’t try to sell you products that would be unsuitable for you. However, this criteria is admittedly difficult to determine at times, particularly if your teller doesn’t know your financial history or your financial goals; unsuitable may be subjective in this case.
Your best bet is to have a personal policy in place; you don’t agree to any loans, credit cards or other non-FDIC insured financial products on the spot. If the bank employee is trying to sell you something, then ask for time to think about it. Otherwise, you may find yourself sitting in the loan officer’s office signing up for something you don’t need.
Finally, also remember this corollary; just because the teller encourages you to apply for a loan, doesn’t mean you’ll get it. Again, consider things from the teller’s point of view. He/ she will probably ask everyone who comes to his/ her window to sign up for the new financial instrument of the month. Asking doesn’t equal getting. You may not get the loan you apply for even if the person at the window makes it sound like you have a good chance of approval.
A look at your entire credit history
Your credit history follows you and follows you with some banks, no matter how old the information might be. Other lenders and banks though, do consider other factors than just your credit score.
If you’ve had a bankruptcy or a foreclosure, late payments or even too many recent hits on your credit report, all of those factors could affect your loan’s interest rates or your ability to get a loan. Additionally, don’t be surprised if your bank has record of old debts that have long been erased from your actual credit report.
Basically, this means that your banker will probably look at both your credit score and your credit history when you apply for a loan. In this respect, it’s best to shop around for the right loan for you.
While you may get a good deal from your loan bank, you may get an even better deal if you look into online loans from lenders that operate in the state you live in, even if they are not based there. Consider online loans in Wisconsinif you live there, and don’t limit yourself just to your local financial institutions or the neighborhood bank you’ve been with for years.
Your income and employment history make a difference
If you have a high income and a steady employment history, then you’ll have an easier chance of obtaining a loan. To a banker, a higher income equals an ability to pay back your loan and a history of stable employment means pretty much the same thing. Your employment history also establishes how stable you are, something that a bank officer looks at when deciding whether or not to give you a loan. Keep in mind that while most banks look at your credit history, it is possible to get a personal loan even with less than perfect credit. So make sure to do your research into your options.
Your chances of getting a loan depend on a number of factors, including these secrets that your banker won’t tell you about. If you’re thinking about applying for a loan keep these four principles in mind; they’ll save you some heartache.